NEW YORK: CVS Health Corp is moving closer to a more than $66 billion cash and stock deal to buy health insurer Aetna Inc that could be announced as early as Monday, a source familiar with the matter said on Thursday.
The companies are in advanced stages of negotiating a deal that would value Aetna at between $200 and $205 per share and would be comprised mainly of cash, according to a Wall Street Journal report.
Shares of both companies rose on the news, with the enhanced cash component viewed as a positive surprise. CVS shares were up 3.9 per cent and Aetna gained 1.3 per cent.
Jeff Jonas, portfolio manager for Gabelli Funds, said the reported price was a bit less than he had expected.
“The bigger deal is if they’re going to be paying mostly cash it would be much more accretive to CVS,” he said. “Initially I’d been thinking anywhere from a third to a half in stock and it’s a pretty depressed stock price. This is actually much more positive than I thought,” added Jonas, whose fund holds both stocks. — Reuters
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